Oil helps FTSE 100 end turbulent week firmer, but Brexit weighs

LONDON (Reuters) - Britain’s top stock index rose on Friday after a tumultuous week, supported by a rally in oil stocks after OPEC and Russia agreed to cut output, but investors also fretted about next Tuesday’s key parliamentary vote on Brexit.

FILE PHOTO: People walk through the lobby of the London Stock Exchange August 5, 2011. REUTERS/Suzanne Plunkett/File Photo

The FTSE 100 .FTSE rebounded from Thursday's plunge to gain 1.1 percent, but put in its worst weekly performance in two months as jitters over Britain's divorce from the European Union, the U.S.-China trade war and worries about global growth sapped confidence in the UK market.

The British parliament is due to vote next Tuesday on Prime Minister Theresa May’s Brexit deal amid expectations that it will be rejected, prolonging the uncertainty over Britain’s future relations with its biggest trading partner.

Financials, consumer stocks and oil majors boosted the index.

Oil stocks .FTNMX0530 rallied after OPEC and its Russia-led allies agreed to slash output by more than the market had expected even as Washington ramps up pressure to reduce the price of crude.

BP (BP.L) rose 2.3 percent, Shell was up 3 percent for its best day since June, while mid-caps Premier Oil (PMO.L) had its biggest daily gain since July 2017 and Tullow Oil (TLW.L) jumped 7.4 percent.

Still, many investors and analysts remained unconvinced that the gains represented a change in sentiment.

“Are people going to put new cash to work convincingly now, thinking this is the low? I can’t see there’s any urgency to do that now really,” said Ian Williams, analyst at Peel Hunt.

“It does look like a bounce from an extreme technical oversold level, but I don’t think it means we’re out of the woods yet by any means,” he said.

Shares in Associated British Foods (ABF.L) fell 4.6 percent after the Primark owner said trading at its budget fashion chain was challenging in November.

“The next three weeks will be critical, and there may be a chance to reverse the trend if the weather normalises,” Credit Suisse analysts said.